The officers had been summoned to the home on Scoville Street near 55th Avenue by Willis' sister and caretaker, Lavita Oliver, because he had stopped taking his medication and needed to see his doctor.

Police have called the shooting justified, saying Clement and Fought had no choice but to open fire after Willis stabbed Clement in the arm. Alameda County prosecutors cleared both officers of criminal wrongdoing.

But Oliver and Willis' mother, Lillie Willis, said in a suit filed in U.S. District Court in San Francisco that Glen Willis had posed no threat and that the shooting underscored the inability of police to deal with mentally ill people.

"At the time he was fatally shot, Glen Willis made no aggressive or furtive movements" and "posed no threat of physical harm to any individual," the suit said.

The City Council voted in closed session Tuesday night to pay $40,000 to the mother and sister without admitting liability.

The civil case languished for years, in part because the plaintiffs had changed attorneys.

The women's lawyer, Dennis Cunningham, said Wednesday, "You wouldn't expect to have a settlement so cheap in such a nasty case. This is a really tragic case that happened. It never should have happened, and the family had to go through all kinds of insane stuff to even get this far."